RESOURCE CENTRE MANUAL
HEALTHLINK WORLDWIDE
2.3.3 How to draw up a budget
There are two types of budgets that you need to prepare:
• a minimum budget which is your basic operating budget
• a more optimistic budget which includes activities that you would like to do
if the funds are raised.
The minimum budget should be based upon how much income you are certain
of receiving, perhaps with a small degree of optimism that savings will be made
through the year or that additional funds will come in. Generally, the minimum
budget aims to balance the expenditure and income. This is sometimes called
an income-led budget.
The minimum budget should list all the expected costs of running the resource
centre over the next year. It is built up by taking the prices of each individual
item, or estimates from suppliers. It should also include a suitable percentage to
cover inflation.
If the resource centre has been running for some time, the annual budget can be
based on the previous year’s budget, taking into account any new items or
services and likely inflation.
Indicate any expected income for the resource centre. Subtracting the expected
income from the expected activities should leave a zero balance, or only a very
small deficit (loss). If this does not happen, then it means that it is not possible
to do all the things included in the expenditure section, unless additional funds
can be raised. This means that some expenditure may have to be delayed or cut.
The more optimistic budget is the type of budget that you will usually prepare
when you are developing proposals for future work. This type of budget sets
out things that you would like to do, if you had the resources. A more
optimistic budget helps to identify fundraising targets, because it is almost
certain to have a deficit.
Establishing fundraising targets, and identifying work that you would like to
do, is the first step in fundraising (see Section 2.4).
10 SECTION 2: MANAGEMENT AND FINANCE